The Bombay High Court has rejected a commercial suit filed by Rushabh Sealink and Logistic Private Limited against Hapag-Lloyd (India) Private Limited over the cancellation of container bookings, holding that the suit was barred by Section 12A of the Commercial Courts Act, 2015 and was also not maintainable against the Indian agent of the disclosed foreign principal under Section 230 of the Indian Contract Act, 1872. Justice Sandeep V. Marne allowed the Hapag-Lloyd India’s application under Order VII Rule 11 CPC.
The dispute arose after Hapag-Lloyd AG issued quotations for container bookings to Djibouti in February 2022. Rushabh Sealink booked 510 containers, but the bookings were cancelled two days later, allegedly due to an internal system error. The company subsequently claimed damages including loss of profits, business opportunities and reputation.
The Court held that the Plaintiff had only initiated pre-institution mediation on February 21, 2025 and filed the suit five days later, without awaiting completion of the process. Although a non-starter report was subsequently issued on May 9, 2025, the Court held that this could not cure the defect. Justice Marne observed:
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“What is contemplated under Section 12A(1) is not mere ‘initiation’ but ‘exhaustion’ of the remedy of pre-institution mediation…The Legislature has not contemplated pre-institution mediation in commercial suits to be a mere formality. Use of the word ‘exhausts’ in Section 12A (1) of the C.C. Act makes it abundantly clear that mere filing of an application to the Mediation Centre does not satisfy the requirement under Section 12A of the Act. The mandatory requirement of exhaustion of pre-litigation mediation get satisfied only if either of the three eventualities of settlement, or report of non-settlement, or nonstarter report occurs.”
The Bombay High Court also rejected the suit on the ground that it was not maintainable against Hapag-Lloyd (India), which was merely the Indian agent of the disclosed foreign principal, Hapag-Lloyd AG. The Court noted that the quotations were issued by Hapag-Lloyd AG and the booking confirmations identified Hapag-Lloyd India only as its “agent” and “booking contact.” Since the dispute concerned cancellation of container bookings and not a contract for sale or purchase of goods, the statutory exception under Section 230 of the Contract Act was held to be inapplicable. Section 230 provides:
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230: Agent cannot personally enforce, nor be bound by, contracts on behalf of principal.—
In the absence of any contact to that effect an agent cannot personally enforce contracts entered into by him on behalf of his principal, nor is he personally bound by them. Presumption of contract to contrary.— Such a contract shall be presumed to exist in the following cases:—
(1) where the contract is made by an agent for the sale or purchase of goods for a merchant resident abroad;
(2) where the agent does not disclose the name of his principal;
(3) where the principal, though disclosed, cannot be sued.
The Court distinguished the Supreme Court’s decision in Cochin Frozen Foods Exports (P) Ltd. v. Vanchinad Agencies, (2004) 13 SCC 434 and the Bombay High Court’s decisions in idland Overseas v. M.V. “CMBT Tana” & Ors., 1999 SCC OnLine Bom 460 and M.V. X-Press Annapurna v. Gitanjali Woolens Pvt. Ltd. & Ors., 2011 SCC OnLine Bom 355, holding that those authorities did not make an Indian agent of a disclosed foreign principal liable in the circumstances of the present case. The Court observed: “The Suit filed by the Plaintiff against the Defendant as merely an Indian agent of a disclosed foreign principal is clearly barred by the provisions of Section 230 of the Contract Act.” Accordingly, the plaint rejected under Order VII Rule 11 CPC.
As regards the alleged exclusive jurisdiction of courts in Hamburg, Germany, the Court left the issue open. It held that since the present suit itself was not maintainable against Hapag-Lloyd India, the question of jurisdiction would have to be considered if Rushabh Sealink subsequently institutes proceedings against Hapag-Lloyd AG.
The plaint in Commercial Suit was accordingly rejected under Order VII Rule 11 CPC and the suit was dismissed. There was no order as to costs.
